COVID-19 Business Resource Series: Impact on the Retail Industry During the COVID-19 Pandemic

COVID-19 has already profoundly altered the way business is being conducted in the United States and around the world. Industries are being shaken like ragdolls and the retail industry has been hit harder than most. Our retail digital marketing experts have developed a crucial guide to what is happening in the retail industry during the COVID-19 pandemic in order to help your retail company maintain business and thrive in the coming months.

Effects of the Novel Coronavirus Pandemic on the Retail Industry

Unlike companies in other industries that can allow their employees to work remotely and continue daily operations, many retail businesses are not able to continue providing service to customers due to store closures. This has led to a large number of unemployed and furloughed Americans, with projected unemployment rates capping at around 32%.1 Many are living in a state of fear because their livelihoods have been compromised. The closing of storefronts due to the COVID-19 pandemic is presenting long-term challenges for retail business owners. It is essential to become aware of strategies that can be employed in the retail industry during the COVID-19 pandemic to mitigate losses and change the current retail landscape.

Strategies Retail Industry Businesses Can Employ to Mitigate COVID-19 Impact

Utilize Remaining In-Store Staff

Many brick-and-mortar spaces have sent almost all employees home, perhaps with the exception of those in managerial positions. Instead of closing up shop completely, businesses can offset the lack of in-store purchases by fulfilling online orders and offering contactless curbside pick-ups, taking the appropriate precautions, of course.

Shift to E-Commerce with a Customer Service Focus

The trend toward e-commerce and away from traditional brick-and-mortar retail is not new but is now skyrocketing. Consumers are unable to make purchases anywhere but online for many items or are choosing to get necessities online for fear of catching COVID-19 in public spaces. It is estimated that around 31% of households shopped for groceries online in March 2020.2 This number is unprecedented and will change the buying habits of consumers permanently. Take this time of disruption to build out your e-commerce website and capabilities. Task current employees with building out an online customer support department to ensure a smoother transition, retain talent and ease user experience. Customer service is a crucial advantage that can be utilized in any market and should not be undervalued (look at Zappos’ WOW Philosophy for inspiration).3

Alter Product Development and Channel Resources Elsewhere

Many larger retailers are maneuvering their resources to be able to fill needs for items such as hand sanitizer and personal protection equipment. One such example is luxury brand Louis Vuitton, who has converted three perfume manufacturing facilities to make hand sanitizer.4 Smaller retailers may not have the flexibility to do something heroic at that scale, but with some creative leverage they may be able to offer local aid.

Don’t Stop Marketing

Ad spend is being heavily reduced due to the economic uncertainty caused by the COVID-19 pandemic. Unfortunately, reduced ad spend tends to be short-sighted. Maintain a long-term advantage over your competition by keeping your brand’s face in the front of people’s minds and on the tips of their tongues through focused pay-per-click advertising and other tactics. Focus on creating high-quality content with an emphasis on keyword research through SEO marketing. Most retailers don’t need to concentrate on marketing their products but can instead shift to cause-based marketing or community outreach.5

Price and Novelty Are Key

With many consumers forced to choose items based on need and not preference amidst the COVID-19 epidemic, we are likely to see a decrease in brand loyalty.6 Even die-hard daily Starbucks customers have had to give up or accommodate their spending habits and reduce consumption of their beloved coffee brand. By being forced to take what is available, consumers may realize that they have new brand preferences or less brand loyalty. For many companies, this means that they must shake up their strategy and try to woo new customers. Two main strategies that businesses tend to take are to go the price route and undercut competition or use product differentiation to create value through novelty. Consider both as an option to make up for lack of in-store sway and incorporate them into your business’s marketing strategy going forward. An excellent way to showcase a brand is through a video marketing strategy.

Stay Social

Our social media marketing experts recommend that you maintain your company presence through social media. Using social media will continue to give your brand a voice throughout this looming period of uncertainty and isolation. Connect and engage with consumers, determine their needs as well as how you can help, and work toward creating a better brand relationship with your audience.

Other blogs in this series:

Essential Remote Work Tools

Working from Home During the COVID-19 Outbreak

Impact on the Food Service Industry

Do’s and Don’ts of Saving Money in Times of Crisis

Impact on the Education Industry


[1]NBC – Coronavirus Job Losses Could Total 47 Million

2Marketing Dive – Most Brands Aren’t Ready to Win in E-Commerce

3eTail – How Zappos Wins at Customer Service Every Day

4Forbes – Note to Companies and Brands: Don’t Speak Up, Step Up

5Ad Exchanger – How to Find the Bright Spots in a Bad Ad Economy

6Forbes – The Impact of COVID-19 on U.S. Brands and Retailers